Don’t be fooled: Net neutrality is all about cronyism

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The Internet is pretty awesome. Thirty years ago, the idea that a decentralized network of millions of users and dozens of service providers could actually work in a functional way would seem crazy. Yet, the World Wide Web has triumphed as ultimate proof that markets work with minimal government regulation. From the work of millions of self-interested actors has emerged an awning electronic dimension where people can interact, learn, play, shop, and watch, at a minimal cost.

Apparently, not for the federal government. On Monday, President Barack Obama urged the Federal Communications Commission to saddle Internet service providers (ISPs) with many of the same burdensome regulations that telephone companies have to comply with. Why would the president seek to regulate a network that seems to be working efficiently without the government? The answer, unsurprisingly, is cronyism.

For years, Internet giants like Facebook, Google, and Netflix have been pushing for network neutrality to avoid paying for the traffic their users hog from ISPs. As it currently stands, Netflix and YouTube account for half of all peak-hour download traffic in the United States, often leading to slow buffering speeds during prime hours. As a result, some ISPs have sought to provide better service to their customers by suggesting that the Netflix and YouTubes of the world pay slightly more for their users to stream videos faster — a pretty clear-cut win for customers if ever there was one.

Unfortunately, big businesses too often think about how the government can help their bottom line instead of what’s best for the little guy. As a result of a well-orchestrated media campaign, the FCC is on the cusp of reclassifying ISPs under Title II of the Communications Act to enact net neutrality so Big Internet doesn’t have to pay its share of traffic. Ultimately, the change would empower the government to regulate the business models of private ISPs, chaining the Internet to one-size-fits all solutions for millions of customers with different needs.

Internet giants love to scaremonger the public into believing that a world without net neutrality would lead to customers being charged different data plans for the amount of internet they use, much like cell phone companies currently do. The problem with this argument is that we already live in this world, and it is largely not the case. Most Internet subscribers pay a monthly fee that entitles them to as much data as they desire, and that will likely not change anytime soon.

Instead, net neutrality would only hinder ISPs from innovating to improve service for customers. In fact, the only documented violation of net neutrality under the FCC’s recently struck-down Open Internet order demonstrates this point. As I explained in Rare last year, the FCC accused MetroPCS in January 2011 for violating the order:

What exactly was the anticompetitive line the cell phone company so carelessly crossed? MetroPCS offered its customers access to unlimited YouTube videos in a format customized for fast streaming. While such market innovation was a win for millions of MetroPCS customers, net neutrality advocates saw it as a threat.

The FCC would do best for Internet users by leaving it alone, allowing ISPs to innovate and evolve to customers demands instead of being bound to business plans designed by government bureaucrats.

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